Retail chain refuses to pay rent in stand-off with retail landlords

Its difficult to know what the answer is. In the UK, they moved a lot of the shopping centres to the outskirts of towns and cities causing the local High St to die a lingering death and many towns to become ghost towns and high unemployment. The out of town shopping centres relied upon cars which are now seen as the great enemy of climate change and global warming. Public transport, too infrequent and inconvenient.It has a role to play but online selling isn't a panacea to cure the ills of the retail industry.

 

I hope no property owner ever shops at his chain again. Talk about being Australian.

 

He isn't the only one, he is just the first one published because he is a well known billionaire. This will be common throughout the industry very shortly...

 

Its about protecting his business , and when its all over the big shopping centres will be all over him as many of the other smaller tenents would go bust or simply dissappear from the malls.

 

Well it’s all about taking advantage of the situation, that’s all.

 

It's not like his commercial landlord let him not paying rent. So in the same sense, his tenants can also now refuse to pay rent.

 

"Nothing personel, its just business "

 

Logic says everyone needs to be prepared to share the pain . If one sector shares all the pain , they go under and the whole system collapses .

Cliff

 

Oh that's great well if I was landlord I'll lock his shops up simple. Sure, other landlords may covert his business afterwards. Good on them. If I'm not getting rent I may as well shut him down - his use of my premises contributes to wear and tear.

 

The pain is shared if we all come to the table and negotiate. If one side unilaterally refuses to pay, that's hardly sharing pain and if it were me I'd definitely lock his shop up. Can I refuse to pay the bank interest and land tax, as I have said many times on this forum.

 

Spot on.
Mr. Lew looks and sounds like a thug in that article. I understand retailers are struggling, but his behavior is just gross, to say the least.
Act like an adult, a professional businessman and negotiate with landlords. Apparently he made his millions not by being fair and square.

 

It is what is is, I suppose, however Premier has also doubled down and told their suppliers that they will be extending payment terms to 180 days according to https://www.smh.com.au/business/com...rms-amid-covid-19-crunch-20200330-p54fap.html

Who knows how much hardship that will cause on the wholesale level?

It will be interesting to see if Myer's CEO John King follows this exact same formula. As a recent AFR article speculated, (allegedly) Solly Lew's private company is one of their major wholesale suppliers, so who can tell what might happen if the shoe is on the other foot?

I realise that in business, when you see an opponent drowning, a hose should be shoved down their throat... just to make sure... but this is appearing to get a bit brutal.

 

Coles and Woolworths have been doing it for years to small business, no one really cared because consumers were just interested in getting the cheapest product.

 

Sol Lew has been juggling retail risk for decades using bullying and fear. Smiggle sell kids pencils for $5....He is making margins. That may not exist. He needs to fight because he copped a king hit.

Massive debt that banks...anz...may not keep writing. He is in trouble. A solvency issue to be tested by a major provider for sure. Like Westfields liquidator or administrstor

 

I was absolutely gobsmacked at the prices when I had a gift voucher for my daughter there. Deserves to go under.

 

Not the only chain not going to pay rent, been many other announcements.

 

I am personally not surprised of Sol's quick remark, he has used this tactic before in dealings I have had with him and in the end he had to pay and pay more than what I originally requested.

Retail landlords, especially those that have no mortgage are going to need some support in this crisis. It isn't fair for a self funded retiree that has say $2m in retail property to lose all of there income when they had worked hard all of there lives and aren't relying on the pension to survive.

Then the government goes ahead and rewards some casual workers more now in jobkeeper payments than they were working casual hours and others on jobseeker payments have just received a considerable boost in their weekly income.

So far all of the government benefits for retail stores has steered towards the tenant, the tenant should therefore pay at least something to their landlord for rent and not pocket the money.

 

You guys like this one?

Car giant AP Eagers seeks three months rent-free from landlords

"In order to help us remain a strong and viable tenant under the Lease, in the spirit of partnership we are seeking a 3-month rent free period commencing 1st April 2020,'' Mr Ward asks in the letter. A copy of the letter has been seen by The Australian Financial Review. Some landlords are furious because AP Eagers on March 20 announced it would halve its final dividend to 11.25c but still pay it on April 20."

It says it isn't paying rent, but it can pay dividends to shareholders (and one of its largest shareholders happens to be on the Board of Directors). In the normal course of finance, creditors rank ahead of equity holders. In this market, great to be equity holders. Don't pay rent, continue to operate, and pay a dividend to yourself. Oh and share price is up today... well I guess when you cut your operating expenses, it's no surprise.

 

This is outrageous.
Everyone knows tenants are struggling, but that is NOT a reason to behave like the biggest jerk in town, which won't get you anywhere except maybe in a court of law.